AT&T billed U.S. for scammers to use text-based Internet service, DoJ says in lawsuit

AT&T is running afoul of the feds again.
This time it's about the telecommunications giant's scheme to get reimbursement from the Federal Communications Commission for services intended to help hearing-impaired customers that instead were used by Nigerian scammers to rip off Americans, according to a U.S. Department of Justice lawsuit announced Thursday.
As IDG News Service reports, the DoJ's complaint stems from a whistleblower lawsuit brought in 2010 by a woman who worked at one of AT&T's Internet Protocol Relay call centers.
IP Relay is a technology that allows users with hearing impairments to make telephone calls via typed Internet messages. The messages are then relayed by communications assistants working for an IP Relay provider. (The whistleblower, Constance Lyttle, was a CA for AT&T in Pennsylvania.)
For providing this service to the hearing-impaired, the FCC reimburses IP Relay providers for calls at the rate of $1.30 a minute.
However, the system and the program can be exploited, especially by international users running the various Nigerian scams and such, so in 2009 the FCC required IP Relay providers to verify the accuracy of each registered user’s name and mailing address.
But, the DoJ said in a press release, AT&T had its own agenda:

The United States alleges that AT&T violated the False Claims Act by facilitating and seeking federal payment for IP Relay calls by international callers who were ineligible for the service and sought to use it for fraudulent purposes. The complaint alleges that, out of fears that fraudulent call volume would drop after the registration deadline, AT&T knowingly adopted a non-compliant registration system that did not verify whether the user was located within the United States. The complaint further contends that AT&T continued to employ this system even with the knowledge that it facilitated use of IP Relay by fraudulent foreign callers, which accounted for up to 95 percent of AT&T’s call volume. The government’s complaint alleges that AT&T improperly billed the TRS Fund for reimbursement of these calls and received (more than $16 million) in federal payments as a result.

AT&T -- which lost a bruising battle with federal antitrust regulators last year when it withdrew its planned purchase of T-Mobile USA -- hotly contests the lawsuit's claims, arguing that it has "followed the FCC's rules."
"As the FCC is aware," a company spokesman said, "it is always possible for an individual to misuse IP Relay services, just as someone can misuse the postal system or an email account, but FCC rules require that we complete all calls by customers who identify themselves as disabled."
The lawsuit seeks triple damages, civil penalties and restitution. So let's see, $16 million in overpayments times triple damages, divided by the federal government's history of wrist-slapping corporations caught in alleged wrong-doing...
I'd say we're looking at a $5 million settlement.